Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

Universal Journal of Accounting and Finance 9(3): 431-441, 2021 http://www.hrpub.org
DOI: 10.13189/ujaf.2021.090318

 Impact of Goods and Services Tax on Indirect Tax
 Revenue of India: With Special Reference to
 Odisha State
 Sanjeeb Kumar Dey1,2

 1
 OURIIP Seed Fund Research Project, OSHEC, India
 2
 Department of Commerce, Ravenshaw University, India

 Received April 12, 2021; Revised May 13, 2021; Accepted June 20, 2021

Cite This Paper in the following Citation Styles
(a): [1] Sanjeeb Kumar Dey, "Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special
Reference to Odisha State," Universal Journal of Accounting and Finance, Vol. 9, No. 3, pp. 431 - 441, 2021. DOI:
10.13189/ujaf.2021.090318.
(b): Sanjeeb Kumar Dey (2021). Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special
Reference to Odisha State. Universal Journal of Accounting and Finance, 9(3), 431 - 441. DOI:
10.13189/ujaf.2021.090318.
Copyright©2021 by authors, all rights reserved. Authors agree that this article remains permanently open access under
the terms of the Creative Commons Attribution License 4.0 International License

Abstract Goods and Services Tax is considered to be Government to establish vertical equity through income
one of the revolutionary tax reforms in India since redistribution or reduce the gap between the rich and the
independence. The foundation of this new taxation system poor. It refers to a mandatory levy by the Government on
is to remove the cascading effect and increase the tax its citizen either on their income i.e., income tax or on
revenue with more transparent mechanism. The present consumptions or productions i.e., value added tax, services
paper is an attempt to assess the impact of this new taxation tax and custom duty to meet the financial requirement for
system on indirect tax revenue of India in general and of social and economic development activities of the country.
Odisha in specific. The study is analytical in nature and is It constitutes a fundamental source of revenue to stimulate
based on published data. Collection of revenue under the economic and social development strategies. At present,
goods and services taxes has been considered from July India has very limited direct taxation system like the
2017 to March 2021. The results show an increasing trend Income Tax, Dividend distribution tax, securities
of indirect tax in India due to implementation of new tax transactions tax, etc. However, there were more than
except a few months because of some administration twenty-seven types of indirect taxation system in India
complexity and prevailing Corona pandemic. Future tax which includes value added tax, customs duty, exercise
revenues have been forecasted using Exponential Triple duty, services tax, entry tax, entertainment tax, and so on
Smoothing function and are compared with actual still July 2017 i.e., introduction of goods and services tax.
collection up to March 2021. So far Odisha state is On an average more than sixty-five percentage of total tax
concerned, expected tax revenue is not yet realised and the revenue arises from indirect tax revenue.
situation may be unfavourable when Central Government The income tax gets amended every year along with the
will stop giving Compensation cess after July 2022. Union Budget through the finance bill to bring more
Keywords GST, India, Odisha, Forecasting, ETS uniformity and ease of compliance of taxation. These
Functions changes are also done with a view to bring more taxpayers
 under its scope and check the avenues of tax evasions.
 There was also an attempt for reconstruction of direct
 taxation system in India during 2009 to introduce Direct
 Tax Code but is not yet materialized. On the other hand,
1. Introduction there are so many indirect taxes and each one having
 Taxation system is an incredible tool in the hands of any overlapping applicability, creates confusion and

432 Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

discourage among the users to do business in India. The is dependent on simplified tax administration process and
existing indirect tax system was characterized with double incentivising transactions with tax invoices. In another
taxation due to cascading effect, complex procedure, study, Mukherjee [13] concluded that while the removal of
multiple taxation system, non-availability of tax credit GST compensation cess (GSTCC) will benefit some states,
throughout the value change, etc. With a view to others might not be that beneficial. If the GST
eliminate these shortcomings, Government of India has compensation is terminated in 2022 then the government
introduced Goods and Services Tax under the banner of needs an appropriate framework for strengthening various
“one nation- one tax- one market” with effect from 1st July aspects of GST. Charan et al. [5] concluded that GST is
2017 after fourteen years of deliberations and discussions expected to bring simplification in the accounting process
which is applicable to the whole of India. It is considered to and paperwork of business organisations, facilitate equal
be the biggest and revolutionary tax reform since our distribution of revenue between the states and centre,
independence (Garg & Kumar [6], Kawale & Aher [8], significantly improve trade and commerce and thereby
Patil [20], Tiwari & Singh [29]). It subsumes almost all develop the economy. In addressing the governance aspect
indirect taxes lived by the States and Central Government of GST in Malaysia, Sanusi [25] suggested that the country
and resulted into one tax i.e., Goods and Services Tax. will not be dependent on overseas loan if the government
 Since its first implementation by France in 1954, Goods revenue is well collected, smartly managed and fairly
and Services tax proves to the mechanism that has the distributed. Information technology plays a major role in
capacity to increase the revenue in most neutral and the launch of a new tax regime. Every country which
transparent manner. Till date, more than 160 countries in introduced GST was more or less dependent on their IT
the World have adopted this tax in one form or other. The infrastructure. In case of Malaysia, the government was
transition from the old system to this new uniform taxation able to collect more GST revenue because of strong IT
system was smoother in most of the countries as mostly infrastructure (Mansoor et al., [11]). According to Tewari
taxes lived by the Central Government like Australia and [28], GST will lessen the tax burden, bring transparency,
Germany. Country like India where imposition of taxation increase government revenue by expanding tax base,
lies with both the Central and State Government will eliminate the roadblock of multiple tax barriers and foster
obviously take time to settle down as witness by countries the development of exports. In their paper, Purohit and
like Brazil, Canada and the European Union where even Purohit [22] estimated central GST revenue with the help
after years of experience in these countries, the reform is a of three approaches which are revenue, turnover and
work in progress. In Canada, Bird [3] argues that the consumption approach. As per their suggestion, ample
transition has not been easy and even after 28 years of amount of GST revenue can be collected if the government
experience it is still a work in progress. charges 8% dual rate for both CGST and SGST. The
 This new taxation system is characterized by seamless government should also charge the necessity items at a
claim of input tax credit throughout the value chain, lower rate of 4%.
destination-based taxation as against origin-based taxation, Rao [24] searched for the answer to whether GST is a
avoiding double taxation resulted from cascading effects, gorilla or chimpanzee or a primate. His pursuit of the
more transparency system, increased ease of doing answer showed that the introduction of GST was
business, simpler and use friendly compliance, digital imperative as it can help in minimising the compliance
platform, increase the revenue base, etc. (Beri [2], Leena & costs, collection cost as well as the cost of resource
Sameena [10], Nayyar & Singh [18]. Petroleum products, allocation. GST can also help in raising additional tax
alcohol for human consumption, aviation turbine fuel, high revenue in the medium run. He reached at the conclusion
speed diesel motor spirit and natural gas are kept outside that GST is a genius like a primate not a gorilla or
the scope of this new taxation. GST is going to celebrate its chimpanzee. In the words of Alappatt and Shaikh [1], GST
fourth anniversary during July 2021, but still the system is a sustainable source of revenue for Malaysia. During the
requires continuing changes to bring transparency and ease initial phase GST may cause inflation but it will subside
of compliance with law. Nevertheless, the time is fitting to after very few years. The proper implementation of GST
take stock of the progress in implementing the tax, analyse will expand the tax base, increase government revenue and
its revenue implications and economic impact and identify help the public in managing their tax burden. Khoja and
further challenges and reform areas to reach the goal of Khan [9] the role of GST in reducing the cascading effect
raising revenue productivity and minimising cost. and its impact on revenue performance of commodity
 taxation market of India. By collecting time series data
 from 1990 to 2017 and applying simultaneous equation
2. Literature Review model they found that the enforcement of GST in India has
 caused a decrease in cascading and ameliorated the revenue
 performance of the commodity tax structure. In the post
2.1. Impact of GST on Tax Revenue
 GST years, the central and state government have
 In the words of Mukherjee [12] viewed that the triumph performed better in terms of tax revenue collection.
of GST, in terms of compliance and mustering of revenue, Stewart et al. [27] propounded that GST was an

Universal Journal of Accounting and Finance 9(3): 431-441, 2021 433

improvement over the current tax system of Australia. the following hypotheses have been framed to be tested in
Chakraborty [4] reported that GST can improve the exports this study:
of the Indian textile industry. This new system has also H1: There is a significant increase in the indirect tax
bunged the revenue leakage of the previous tax system. It revenue during GST regime.
has reduced the ultimate tax burden of the taxpayers, H2: There is no significant difference between
eliminated the cascading effect, and provided smooth flow forecasted and actual revenue.
of input tax credit which was not available in the previous
taxation system. Nayaka and Panduranga [17] reported that
GST has increased the amount of indirect tax revenue of 3. Objectives & Methods
the nation but it has lessened the tax revenues of the
Karnataka state. In another study, Mukherjee [15], [16]
focused on assessing the effect of pandemic on the GST 3.1. Objectives of Study
revenue of the states and union and also tried to estimate The primary focus of the study is to access the impact of
the amount of GST revenue and compensation cess. He goods and services tax on tax revenue of India in general
reported that the total GST collection of all major states and of Odisha state in particular. The paper also focuses on
will vary between the approximate rates of -3.3 and -12.3 forecasting the GST revenue for the upcoming years based
percent. on the historical data.

2.2. Impact of GST on Cost and Compliance 3.2. Nature of Study
 Rao [23] opined that the Indian government can increase The study is analytical in nature and based on purely
the tax revenue by minimising the compliance cost, the cost secondary data. It covers nine years spreading from 2013 to
of collection and the economic costs. Pandey [19] 2021. All the data have been collected from the official
suggested that the government should also have a general website of the central board of indirect taxes and customs,
consent regarding the threshold limit, revenue rate and India, Press Information Bureau, Government of India and
inclusion of liquor, petroleum products, real state and Commissionerate of CT and GST, Government of Odisha.
electricity in the GST structure. Pegu [21] viewed that the
real victory of Indian GST can be determined only after
evaluating its effect on the general consumers. He also 3.3. Scope of Study
propounded that GST can simplify the taxation system only The study covers various aspects of India and Odisha
when there is a general agreement on the revenue rate, State. Odisha is the 8th largest state by area, 11th largest
threshold limit, and inclusion of some products in the GST state by population and 16th largest state by economy
structure. Mukherjee [14] has analysed the performance of representing 750 billion USD situated in the eastern part of
GST in terms of revenue and compliance gap at both India (PRS India, 2020). Further, as per number of active
national and state level. His study indicated a gap in the taxpayers registered under GST as on 31 December 2020,
filing rate of GSTR-1 and GSTR-3B which has caused Odisha stood almost median out of total 39 states in India
problems for claim of input tax credit. Odisha is in the representing 2.20%. Considering the above facts, Odisha
second position regarding the compliance gap during the state has been given special focus which will represent the
author’s period of study. Minor states have outperformed overall GST scenario.
the major states in GST compliance gap. In the words of
Singh [26], GST will make compliance easy, bring
 3.4. Variables Considered
uniformity in the tax structure, remove the cascading
nature of taxes, improve competitiveness among business, For achieving the objectives of this study, revenue
and help both state and central government to improve variables i.e., Central Goods and Services Tax, State Goods
revenue efficiency and is easy to implement. According to and Services Tax, Integrated Goods and Services Tax,
Holla [7], the strengths of Indian GST are that it is simple, State Compensation Cess, Active Taxpayers and GST
boots government revenue, makes that market uniform, Returns.
causes rise in capital investment, etc. GST will bring the
opportunity of removal of cascading effect, reduction in 3.5. Techniques Adopted
consumer tax burden, etc.
 Most of the earlier studies concentrate on overall All data collected have been suitably tabulated in a
implication of GST on economy. Many studies attempt to comparative manner and appropriate charts are also used.
study the theoretical aspects, procedural aspects and For the purpose of achieving the objectives, simple average,
revenue implication. Seldom any work finds the growth growth rate, t-test, Exponential Triple Smoothing
and impact of GST on indirect tax revenue over these four techniques for forecasting future values have been used.
years of implementation. Considering the above discuss, MS-Office 2019 and SPSS tools have been used to analyse

434 Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

the data. with a yearly growth rate of 4.01%.
 Table-2 and Figure-1 show the comparative trend of
 number of returns by the active taxpayers during last four
4. Results and Discussion years. GSTR-1 i.e., furnishing details of outward supply
 It is prominent from table-1 that there is considerable are filed by minimum 76% of eligible taxpayers in Odisha
increase in the number of registered taxpayers under GST. while the same is 80% in all India basis. Similarly,
As on 31 December total 278645 numbers of active GSTR-3B i.e., monthly returns for all regular taxpayers is
taxpayers registered under Odisha which a growth rate of almost the same by both Odisha and India as a whole. The
8.94% as against last financial year which is double of All return filing efficiency of Odisha taxpayers is definitely not
India growth rate. On the contrary total number of active at par with the all-India level.
taxpayers in India is 10782730 as on 31 December 2020
 Table 1. Comparative Status of Active Taxpayers under GST
 Odisha (State Level) India (Federal Level)
 Date 31-12-2019 31-12-2020 31-12-2019 31-12-2020
 Normal Taxpayers 2,22,058 2,44,241 1,03,19,462 1,07,82,730
 Composition Taxpayers 30,570 30,527 16,83,706 16,89,081
 ISD 77 58 8,179 7,094
 Casual Taxpayers 15 3 1,872 533
 TCS 141 200 8,243 11,574
 TDS 2,873 3,573 1,75,446 1,95,511
 NRI 1 0 23 27
 OIDAR 0 0 366 249
 UIN Holders 43 43 2,235 2,276
 Total 2,55,778 2,78,645 1,21,99,532 1,26,89,075
 YoY Growth 8.94% 4.01%
 Source: cbic.gov.in and odishatax.gov.in
 Table 2. Comparative growth of returns in GST
 Odisha India
 Return Year No. of Eligible Total Returns No. of Eligible Total Returns
 Percentage Percentage
 Forms ending Tax Payers Filed Tax Payers Filed
 Mar-18 1,83,516 1,50,000 81.74% 84,55,633 76,34,528 90.29%
 Mar-19 2,18,115 1,74,444 79.98% 1,01,74,978 85,77,608 84.30%
 GSTR-1
 Mar-20 2,23,069 1,70,134 76.27% 1,04,30,804 83,47,493 80.03%
 Dec-20 1,15,490 55,312 47.89% 53,48,268 31,81,281 59.48%
 Mar-18 1,83,516 1,61,776 88.15% 84,55,633 79,05,882 93.50%
 Mar-19 2,18,115 1,92,320 88.17% 1,01,74,978 89,98,036 88.43%
 GSTR-3B
 Mar-20 2,23,069 2,09,677 94.00% 1,04,30,804 94,92,529 91.00%
 Dec-20 2,47,799 1,96,664 79.36% 1,10,10,573 87,15,834 79.16%
 Source: cbic.gov.in and odishatax.gov.in

 Figure 1. Comparative trend in percentage of returns in GST

Universal Journal of Accounting and Finance 9(3): 431-441, 2021 435

 Table 3. Growth of Component wise GST Collections in India (Rupees in Crore)

 Year CGST SGST IGST Cess Total M-O-M Change
 Jul-17 10 10 20958 594 21572
 Aug-17 15252 23257 49968 7156 95633 343.3%
 Sep-17 15131 21979 48930 8024 94064 -1.6%
 Oct-17 14962 22345 47995 8031 93333 -0.8%
 Nov-17 13690 20294 42694 7102 83780 -10.2%
 Dec-17 13928 19700 42765 7921 84314 0.6%
 Jan-18 14874 21542 45338 8071 89825 6.5%
 Feb-18 14763 20621 42382 8196 85962 -4.3%
 Mar-18 16266 22055 46326 7520 92167 7.2%
 Apr-18 18653 25704 50548 8554 103459 12.3%
 May-18 15866 21691 49120 7339 94016 -9.1%
 Jun-18 15968 22021 49498 8123 95610 1.7%
 Jul-18 15877 22293 49951 8362 96483 0.9%
 Aug-18 15303 21154 49875 7628 93960 -2.6%
 Sep-18 15318 21061 50070 7993 94442 0.5%
 Oct-18 16464 22826 53419 8001 100710 6.6%
 Nov-18 16812 23070 49726 8029 97637 -3.1%
 Dec-18 16442 22459 47936 7889 94726 -3.0%
 Jan-19 17763 24826 51225 8689 102503 8.2%
 Feb-19 17625 24192 46953 8477 97247 -5.1%
 Mar-19 20353 27520 50418 8286 106577 9.6%
 Apr-19 21163 28801 54733 9168 113865 6.8%
 May-19 17811 24462 49891 8125 100289 -11.9%
 Jun-19 18366 25343 47772 8457 99938 -0.3%
 Jul-19 17912 25008 50612 8551 102083 2.1%
 Aug-19 17733 24239 48958 7273 98203 -3.8%
 Sep-19 16630 22598 45069 7620 91917 -6.4%
 Oct-19 17582 23674 46517 7607 95380 3.8%
 Nov-19 19592 27144 49028 7727 103491 8.5%
 Dec-19 19962 26792 48099 8331 103184 -0.3%
 Jan-20 20944 28224 53013 8637 110818 7.4%
 Feb-20 20569 27348 48503 8947 105367 -4.9%
 Mar-20 19183 25601 44508 8306 97598 -7.4%
 Apr-20 6325 8439 14670 2738 32172 -67.0%
 May-20 12219 16302 28341 5289 62151 93.2%
 Jun-20 18980 23970 40302 7665 90917 46.3%
 Jul-20 16147 21418 42592 7265 87422 -3.8%
 Aug-20 15906 21064 42264 7215 86449 -1.1%
 Sep-20 17741 23131 47484 7124 95480 10.4%
 Oct-20 19193 25411 52540 8011 105155 10.1%
 Nov-20 19189 25540 51992 8242 104963 -0.2%
 Dec-20 21365 27804 57426 8579 115174 9.7%
 Jan-21 21923 29014 60288 8622 119847 4.1%
 Feb-21 21092 27273 55253 9525 113143 -5.6%
 Mar-21 22973 29329 62842 8757 123901 9.5%
 Average 16929 23079 47306 7728 95043
Source: www.pib.gov.in/press release various issues

436 Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

 Figure 2. Trend of Component wise GST Collections in India

 Figure 3. Trend of Component wise GST Collections in Odisha

 Table-3 presents the growth of goods and services tax throughout the period while the revenue from IGST is
revenue in India since its implementation. The tax revenue collected on inter-state supply and import varies
is lowest in the month of April 2020 i.e., Rs.32172 crores disproportionately and shows an increasing trend.
and is obvious because of outbreak of Corona virus and Table-4 shows the goods and services tax revenue
subsequent lock down, shut down of business activities. collection of Odisha since application. It includes Odisha
The highest growth in monthly collection of revenue is Goods and Services Taxes, IGST and all other taxes that
witnessed in the month of May and June 2020 because of were imposed by the State Government and now subsumed
outstanding GST payment of previous months. The in GST. It also shows similar pattern of growth over the
maximum GST revenues is collected during March 2021 months as witnessed in all India revenue. The revenue
since its introduction. The growth rate GST revenue was collection decreases up to 70.3% in the month of April
(-) 41%, (-) 8%, 8% and 14% in the four quarters 2020 as compared to March 2020. The average OGST
respectively during 2020-21, as compared to four quarters collection is Rs. 603 crore and average total GST
of year 2019-20, which shows the collection efficiency and collections is Rs.1003 crore. Figure-3 shows a uniform
growth of economy as a whole. pattern of OGST and IGST collection in Odisha while
 Figure-2 clearly indicates that collection of other taxes that are subsumed in GST, shows a decreasing
compensation cess, CGST and SGST/UTGST are uniform trend.

Universal Journal of Accounting and Finance 9(3): 431-441, 2021 437

 Table 4. Growth of Component wise GST Collections in Odisha (Rupees in Crore)

 Year SGST (OGST) IGST Others Total M-O-M Change
 Jul-17 0.112 0.000 1234.709 1234.822
 Aug-17 466.929 182.260 147.743 796.932 -35.5%
 Sep-17 451.703 251.797 105.826 809.327 1.6%
 Oct-17 531.106 331.197 39.849 902.152 11.5%
 Nov-17 440.428 282.893 59.538 782.859 -13.2%
 Dec-17 402.489 323.681 74.068 800.238 2.2%
 Jan-18 469.549 370.559 26.655 866.763 8.3%
 Feb-18 483.775 314.072 9.126 806.973 -6.9%
 Mar-18 503.846 320.874 112.218 936.938 16.1%
 Apr-18 622.063 369.983 7.348 999.393 6.7%
 May-18 492.691 217.198 6.568 716.456 -28.3%
 Jun-18 514.533 293.141 46.763 854.438 19.3%
 Jul-18 492.498 390.355 19.471 902.324 5.6%
 Aug-18 477.308 307.087 7.483 791.877 -12.2%
 Sep-18 507.083 286.172 19.460 812.715 2.6%
 Oct-18 535.295 323.209 9.547 868.052 6.8%
 Nov-18 504.752 300.283 8.540 813.576 -6.3%
 Dec-18 563.339 206.775 25.445 795.559 -2.2%
 Jan-19 595.439 287.801 21.413 904.653 13.7%
 Feb-19 672.990 260.397 39.247 972.634 7.5%
 Mar-19 790.543 339.066 14.703 1144.313 17.7%
 Apr-19 875.421 498.318 2.049 1375.788 20.2%
 May-19 551.758 261.529 4.159 817.447 -40.6%
 Jun-19 775.753 276.649 -18.217 1034.185 26.5%
 Jul-19 669.613 598.664 44.513 1312.790 26.9%
 Aug-19 665.152 356.463 7.220 1028.835 -21.6%
 Sep-19 560.184 363.216 1.827 925.228 -10.1%
 Oct-19 610.509 307.695 6.740 924.944 0.0%
 Nov-19 685.250 377.468 5.543 1068.261 15.5%
 Dec-19 729.199 419.764 5.165 1154.128 8.0%
 Jan-20 743.125 407.869 14.338 1165.332 1.0%
 Feb-20 802.446 398.735 12.474 1213.655 4.1%
 Mar-20 784.812 483.929 15.986 1284.727 5.9%
 Apr-20 316.289 59.764 5.715 381.769 -70.3%
 May-20 467.820 231.252 6.333 705.405 84.8%
 Jun-20 760.740 319.475 30.939 1111.154 57.5%
 Jul-20 801.576 435.587 15.446 1252.609 12.7%
 Aug-20 683.646 286.917 10.720 981.283 -21.7%
 Sep-20 619.137 437.487 14.818 1071.442 9.2%
 Oct-20 675.828 480.836 12.428 1169.092 9.1%
 Nov-20 683.945 477.894 23.166 1185.005 1.4%
 Dec-20 678.498 414.423 19.226 1112.147 -6.1%
 Jan-21 777.710 516.117 14.325 1308.152 17.6%
 Feb-21 781.06 590.543 17.638 1389.241 6.2%
 Mar-21* 925.681 724.000 19.320 1669.001 20.1%
 Average 603.192 348.520 51.724 1003.436
Source: www.odishatax.gov.in/revenue reports
*Revenue for the month of March 2021 has been taken as gross of actual tax deposited by the dealers.

438 Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

 Figure 4. Compensation Cess Received against Claim by Odisha

 As per the terms of the GST Act, the Central based on theoretical foundations and has often been
Government shall compensate the State Governments for over-emphasized by practitioners. Triple exponential
loss of revenue due to implementation of GST for first five smoothing with multiplicative seasonality is given by the
years. Every month, each state has to prepare and calculate formulas:
the loss of revenue in their concerned state and demand to 1 +1 − 1 +2 − 2 + − 
the Central Government. Table-5 and Figure-4 shows the 0 = ( + +⋯+
 
compensation cess demanded and actually received from
the Central Government by Odisha during last four years. It Since, indirect tax revenue is primarily based on
is prominent to mentioned here that the percentage of consumption and supply, its flow is subject to seasonal
compensation cess received against demand has decreased variation. Hence, setting the initial estimates for the
year after year. On an average only 50% of required seasonal indices Ci{\displaystyle c_{i}} for
compensation cess has been released by the Centre. i=1,2,3,………L {\displaystyle i=1,2,\ldots ,L} is a bit
 more involved. In our data, {\displaystyle N}N is the
Table 5. Status of Settlement of Compensation Cess to Odisha (Rupees number of complete cycles or year, then:
in Crores)
 
 Year Claimed Received Realised % Due 1 ( − 1) + 
 = � = 1,2, … … … . , 
 2017-18 2350.72 2264.00 96% 86.72
 
 =1

 2018-19 4185.75 3145.00 75% 1040.75 Where,
 2019-20 5356.57 3204.70 60% 2151.87 ∑ =1 ( − 1) + 
 2020-21 7,911.47 1,282.08 16% 6629.40
 = = 1,2, … … … . , 
 
 Total 19804.51 9895.777 50% 9908.736 Note that {\displaystyle A_{j}}Aj is the average value of
Source: cbic.gov.in and odishatax.gov.in {\displaystyle x}x in the {\displaystyle j^{\text{th}}}jth
 year.
 Table-6 presents the forecasted indirect tax revenue on
Forecasting Revenue using ETS functions:
 the basis of old indirect tax revenue which are subsumed in
 I have used exponential triple smoothing (ETS) this new GST laws. Column-2 shows the actual tax revenue
functions for predicting the future indirect tax revenue from old indirect tax system from 2013 to 2017. Column-3
from the existing time series data of indirect tax before and Column-4 represent the actual indirect tax revenue of
introduction of GST i.e., from 2013 to 2017. As this Odisha with and without including compensation cess from
technique uses advanced machine learning algorithms and Central Government. Column-5 shows the forecasted value
is considered a rule of thumb technique, rather than one of indirect taxes for the year 2017 to 2023.

Universal Journal of Accounting and Finance 9(3): 431-441, 2021 439

 Table 6. Forecasting Indirect Tax Revenue, Odisha (rupee in crore)
 Forecasted
 Period
 Indirect Tax Indirect Tax after GST Indirect Tax after GST Indirect Tax on
 ending 31 Statistic Value
 before GST without Compensation with Compensation the basis of tax
 Mar
 before GST
 (1) (2) (3) (4) (5) (6) (7)
 2013 9233.710 Alpha 0.25
 2014 10036.710 Beta 0.00
 2015 10756.290 Gamma 0.00
 2016 11049.340 MASE 0.20
 2017 11834.493 11834.493 SMAPE 0.01
 2018 10652.813 12916.813 12401.916 MAE 127.23
 2019 10575.989 13720.989 13017.813 RMSE 153.99
 2020 13305.320 16510.020 13633.709
 2021 13056.359 14338.439 14249.606
 2022 14865.503
 2023 15481.399
 T-value -3.197 1.677
 95% level of significance
 P-Value 0.049 0.192

 Source: Author’s calculation

 Figure 5. Forecasted Indirect Tax Revenue in Odisha

 When we compare the forecasted revenue with the actual It is clear from figure-5 that actual indirect tax revenue
indirect tax revenue during GST without considering the after GST is little bit lower than the forecasted value. If we
compensation cess, the p value is less than 0.05 hence the considered the actual indirect tax collection including
null hypothesis stands rejected. We can conclude that there compensation cess for the said period then, it is little bit
exists significant difference between estimate value and more or equal to the forecasted value.
actual revenue. But if we considered revenue with Table-7 shows the forecasted monthly indirect tax
compensation cess, then p value is more 0.05, hence we can revenue on the basis of monthly tax collected under goods
conclude that there is no significance difference between and services tax since July 2017. The forecasted value does
actual and forecasted revenue. not include the compensation cess. It shows an increasing
 trend over the years.

440 Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

Table 7. Forecasting Monthly Indirect Tax Revenue, Odisha (rupee in evidence to the State to predict indirect tax revenue and
crore)
 reconsider the claim of compensation cess. It is also helpful
 Forecasted Indirect Forecasted Indirect
 Period Period to the policy formulators and tax authorities to prepare
 Tax Revenue Tax Revenue
 budget and revenue generation strategies according to the
 Apr-21 1249.378 Apr-22 1334.257
 forecasted revenue.
 May-21 1256.451 May-22 1341.330
 Jun-21 1263.525 Jun-22 1348.404
 Jul-21 1270.598 Jul-22 1355.477 7. Scope for Further Study
 Aug-21 1277.671 Aug-22 1362.550
 The present paper considered only total indirect tax
 Sep-21 1284.744 Sep-22 1369.623 revenue that are subsumed in GST. It also covers only one
 Oct-21 1291.818 Oct-22 1376.697 State Odisha and compares it with India. The results have
 Nov-21 1298.891 Nov-22 1383.770
 limited use as it considers only selected variables. More
 variables like direct tax revenue, gross domestic product,
 Dec-21 1305.964 Dec-22 1390.843
 number of tax payers, tax buoyancy, total indirect tax
 Jan-22 1313.037 Jan-23 1397.916 revenue, etc. may be considered to get more realistic results.
 Feb-22 1320.111 Feb-23 1404.990 Further, cross States analysis and multiple regression
 Mar-22 1327.184 Mar-23 1412.063
 analysis would be more useful to policy formulators.
 Total 15459.373 16477.921

Source: Author’s calculation Acknowledgement
 The author would like to thank Odisha State Higher
5. Conclusion Education Council, Department of Higher Education and
 Government of Odisha for OURIIP seed fund research
 GST is no doubt a transparent and efficient tax system support.
that will increase the tax base and revenue in the long run.
Since its inception the revenue has increased but as
expected. This may be because of inherent limitations of
the system and outbreak of corona virus global pandemic.
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